In-store, online benefits target cardholders

By Antoinette Alexander

While CVS/pharmacy’s store clustering initiatives and store brands are fueling front-store profitability, there’s no doubt that its successful, long-standing ExtraCare loyalty program remains a key driver of front-store sales, and it arms the company with a powerful competitive advantage, especially as CVS looks to take the program to new heights.

“Our ExtraCare loyalty program continues to be a key differentiator; and now with more than 15 years of history, today we have roughly 70 million active cardholders. And our vast wealth of experience enables us to continue to develop both new and better ways to enhance the offering for our customers,” Larry Merlo, CVS Caremark president and CEO, said during its second-quarter conference call.

In a major nod to the program’s success, 67% of CVS’ transactions and 82% of its front-store sales go through the ExtraCare program. Plus, research has shown that card members buy 85% more items per trip compared with other customers.

The ExtraCare loyalty program also is enabling CVS to address the newspaper challenge, which has negatively impacted the circulation of its circulars. While the retailer plans to still promote via its circulars, it will reduce pages over time to fund its digital promotions and is piloting in 2012 a personalized circular. As previously reported by Drug Store News, the personalized circular will enable CVS to target its ExtraCare users, via email or via its website, with offers specific to their needs based on their front-store purchasing history.

The retailer also is working to capture a greater share of the shopper’s wallet — especially within health and beauty. This has given rise to the January 2011 launch of the first-ever beauty club program for the retail pharmacy channel.

The Beauty Club provides ExtraCare cardholders who register their cards with additional rewards on beauty purchases and other beauty-specific benefits. The Beauty Club currently has 13 million members.

As reported, the company also is piloting a healthy rewards program to provide added incentives and encourage even greater pharmacy loyalty. If successful, the pilot will roll out nationally in 2013.

It’s a digital world

Leveraging the deep understanding of its customer base via insights gained through its ExtraCare loyalty program, CVS/pharmacy officially unveiled in June a new personalized digital experience on CVS.com, which features extensive health information and resources in addition to customized deals and savings information. The site also features a hub for ExtraCare members to help them manage their savings and deals.

“The beauty of digital is that the technology is now catching up with what it is that we want to create for our customers. The technology can support giving them the level of service, even when they are not at the store, to make them healthier, to enhance their ability to save money; and for us, what is so exciting is that now the technology is becoming so adaptable that we can really unleash our imagination to solve customers’ problems in ways that previously we’ve only dreamed about,” Rob Price, SVP and chief marketing officer for CVS/pharmacy, told DSN in an interview to announce the launch.

The company also is putting considerable energy into developing mobile offerings. For example, pharmacy patients can enroll for text message notifications for prescription pickup, and smartphone users can now use the expanded CVS Mobile App to print photos directly from their smartphone camera or their CVSphoto.com account for same-day pickup.

In addition to printing photos from smartphones, shoppers using the CVS mobile app also can digitally store ExtraCare card information in their smartphones, manage and refill prescriptions and view prescription history, and access full mCommerce shopping.